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Dickinson refinery could by running in 2014

Gov. Jack Dalrymple points to a map of where the new diesel duel refinery will be near Dickinson as David Goodin, CEO of MDU Resources Group, center, and Senate Majority Leader Rich Wardner look on during a news conference on Thursday. (TJ Jerke/Forum News Service)

By Amy Dalrymple and Bryan Horwath
Forum News Service

BISMARCK – A diesel refinery near Dickinson could be operational as soon as late 2014, processing 20,000 barrels of Bakken crude oil per day and helping meet the state’s demand for diesel, officials announced Thursday.

MDU Resources Group announced that Dakota Prairie Refining, a partnership with Calumet Specialty Products Partners, will be under construction as early as April four miles west of Dickinson south of Interstate 94.

Gov. Jack Dalrymple, who joined company officials in the news conference, said building a second refinery in North Dakota has been a long-term goal for the state.

“It will increase the usage of Bakken crude oil right here in the state of North Dakota. It will be another significant supply of diesel fuel right here in North Dakota,” Dalrymple said. “And best of all, this project will be built and operated by the private sector.”

The refinery will process Bakken crude oil that will be primarily transported to the facility by pipeline and produce about 7,000 barrels of diesel per day for use in North Dakota, officials said.

The refinery will employ 100 people once it’s operational and have 400 to 500 workers during peak construction season.

Construction is not allowed until the project receives an air quality permit from the North Dakota Department of Health.

Public comment letters on the permit, which were due to the Department of Health by Monday, were submitted by the Environmental Protection Agency, the National Park Service and Grassy Butte resident John Heiser.

Craig Thorstenson, environmental engineer with the North Dakota Department of Health, said officials will review the comments and make a decision within two weeks.

“Our initial determination was that the facility will comply with all applicable state and federal air quality rules and regulations,” Thorstenson said.

A spokeswoman for Theodore Roosevelt National Park said she’s concerned about the cumulative effect of the industrial projects going on outside the park boundaries.

“What’s going on outside of the park can affect visitors’ perception of their park experience and that’s an important part of coming to a national park,” said Eileen Andes, chief of interpretation and public affairs.

In his letter, Heiser called oil development in western North Dakota “extreme” and said that individual industrial projects “appear to be relatively innocuous, but in totality, they are a considerable threat to the overall quality of air in western North Dakota.”

John Stumpf, vice president for strategic planning for MDU Resources Group, said the refinery will use the most advanced emission-control technology available. It’s projected to emit about 125,000 tons per year of carbon dioxide, but will also take trucks off the roads, Stumpf said. Odors are not expected to be an issue because of modern technology, officials said.

Dickinson Mayor Dennis Johnson said city leaders are excited about the economic impact for the community.

“Those are the types of jobs that we’re looking for in our area,” Johnson said. “Jobs that will be here whether we have $29 oil or $129 oil.”

Dickinson is working on a new wastewater treatment facility and plans to sell 175,000 gallons of treated water per day to the refinery, Johnson said.

The additional diesel supply is expected to meet a high demand but will not be enough to change the price of diesel, Stumpf said. The state’s demand for diesel is more than 53,000 barrels per day and expected to increase to 75,000 barrels per day by 2025, officials said.

“The supply of diesel fuel to our state is a big deal for the most agricultural state in the nation and the state that has some of the heaviest over-the-road trucking activity in the United States,” Dalrymple said.

Al Anderson, commissioner for the Department of Commerce, called the refinery announcement a “historic event.”

“Refineries aren’t built every day,” Anderson said.

The last major refinery built in the lower 48 states of the United States began operating in 1977 in Garyville, La., according to the U.S. Energy Information Administration.

The Tesoro refinery in Mandan, which recently expanded to process 68,000 barrels per day, is currently North Dakota’s only refinery.

Two other refinery projects are in the works in North Dakota. Dakota Oil Processing proposes a diesel refinery near Trenton and the Three Affiliated Tribes is working on a refinery on the Fort Berthold Reservation.

Chester Trabucco, chairman and CEO of Dakota Oil Processing, who attended MDU’s announcement, said officials continue to work on securing financing.

“We’re on their heels,” Trabucco said.

Dakota Prairie Refining
— Partnership with MDU Resources Group and Calumet Specialty Products Partners
— Will process 20,000 barrels of Bakken crude oil per day
— Will produce about 7,000 barrels per day of diesel
— Located on a 318-acre site 4 miles west of Dickinson south of Interstate 94
— Projected to being operating in late 2014
— Estimated cost of $280 million to $300 million
— Will employ 100 people when operating and 400 to 500 contractors during peak construction
— Byproducts will be shipped by rail to other facilities for use or further processing